Paramount Skydance has reached an agreement with a coalition of state attorneys general to delay its merger with Warner Bros. Discovery pending an antitrust trial.
The companies entered into a joint stipulation in the federal lawsuit Friday afternoon, agreeing not to complete the $111 billion deal until five days after the trial opens or June 1, 2027, whichever comes first. No trial date has been set, but the deal is likely to put the merger on hold for at least several months.
A 12-state coalition led by California earlier this week obtained a temporary restraining order blocking the merger from completing for 28 days, pending the outcome of a motion for a preliminary injunction. The states argue that the deal stifles competition in the cable and theater markets and should be blocked.
“Stopping this merger pending litigation is a decisive victory in our commitment to uphold the law and protect the film and television industry,” New York Attorney General Letitia James said in a statement. “We look forward to continuing our litigation to stop this illegal merger.”
Meanwhile, California Attorney General Rob Bonta declared the deal a “huge victory.”
“Our case against this illegal merger is simple and clear: When too few companies have too much influence in markets that are central to American life, things get more expensive and things get worse,” he said. “Today’s agreement is great news for audiences, movie theaters, and the many people who write, build, and create the arts, news, and entertainment that so many of us enjoy. We look forward to continuing to advocate in court and celebrate yet another major victory in our efforts to ensure this illegal merger never sees the light of day.”
Norm Eisen, co-founder of the Democracy Defense Fund and a member of the #BlocktheMerger campaign, also hailed the deal as a victory for grassroots opponents of the deal.
“The Ellisons believed their relationship with President Trump would help them push through a disastrous deal that threatened democracy, creative freedom, and independent journalism. Those of us who joined the #BlocktheMerger campaign helped prove them wrong,” he said. “This collective resistance is turning the tide.”
Paramount had hoped to complete the deal by September 30, when Warner Bros. investors would begin receiving $7 million in daily “ticking fees.” The agreement implicitly acknowledges that without a settlement with the state, that won’t happen.
Paramount had previously sought a three-day hearing on the injunction request in late August and hoped to complete the deal in early September with a judge’s approval.
But the states pushed back against the idea, arguing they needed more time to conduct discovery and prepare for a full trial on the merits. The states were scheduled to file a motion for an injunction Thursday night, but did not do so as the two sides held discussions about the future direction.
The company said in a statement that the agreement is a “huge victory.”
“Today’s agreement is an important victory because the result is exactly what we sought all along: a direct path to an evidence-based trial,” a Paramount spokesperson said. “This is the quickest and clearest way to prove that this deal is good for competition, good for consumers, and good for creators, a conclusion that dozens of competition authorities around the world have already reached. Plaintiffs’ market definition is unrelated to today’s market realities and cannot withstand scrutiny. We look forward to proving our case in court.”
A hearing was scheduled for Aug. 3 in federal court in Oakland, at which time the two sides were expected to fight over the injunction. Both sides agreed to cancel the hearing.
U.S. District Judge Araceli Martinez-Holguin approved the joint provision Friday afternoon, about an hour after it was signed.
The Writers Guild of America filed its own motion for an injunction earlier this week, which was also scheduled to be heard on August 3. The complaint was dropped after Paramount effectively admitted that it would not close the deal until the merits of the antitrust complaint were determined.
The parties also agreed to submit joint stipulations regarding their respective positions regarding the trial schedule by July 31. The states had previously proposed holding the trial in April 2027.
